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Is it better tax-wise to have all bills included in the rent or bills in the names of the tenants?

ripofflondon
Posts: 142 Forumite


Hi all.
Hope this is in the right part of the forum. I have a house with 4 bedrooms which I rent out to 4 separate tenants. To date I have been charging a monthly rent that reflects the fact that all the bills are in my name.
Last year my income tax bill tripled and I believe this is because HMRC's rules now result in tax being charged on turnover not profits?
So my question: from a tax point of view, am I better off putting the bills in the names of the tenants (and adjusting the rent downwards to take account of that)?
Any thoughts / advice gratefully received.
Hope this is in the right part of the forum. I have a house with 4 bedrooms which I rent out to 4 separate tenants. To date I have been charging a monthly rent that reflects the fact that all the bills are in my name.
Last year my income tax bill tripled and I believe this is because HMRC's rules now result in tax being charged on turnover not profits?
So my question: from a tax point of view, am I better off putting the bills in the names of the tenants (and adjusting the rent downwards to take account of that)?
Any thoughts / advice gratefully received.
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Comments
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ripofflondon said:Any thoughts / advice gratefully received.N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill member.
2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 34 MWh generated, long-term average 2.6 Os.Not exactly back from my break, but dipping in and out of the forum.Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Best kettle!0 -
No, they are still taxed on profit but what's allowable expenses are changed periodically, like when they removed the ability to claim the interest on mortgages as an expense.
How are you running your inclusive rate? Is it just a fixed uplift and you hope someone doesnt have electric heating running 24/7? Or are you passing through the actual billed amount so their rent changes all the time?0 -
Hi all
Thanks for responses to date. Yes I need to ask the accountant for tax advice as distinct from using them to do my tax return based on things as they are currently arranged.
How running the rate? It's a fixed uplift and to date the tenants have been very good about not taking the P.0 -
ripofflondon said:Hi all.
Hope this is in the right part of the forum. I have a house with 4 bedrooms which I rent out to 4 separate tenants. To date I have been charging a monthly rent that reflects the fact that all the bills are in my name.
Last year my income tax bill tripled and I believe this is because HMRC's rules now result in tax being charged on turnover not profits?
So my question: from a tax point of view, am I better off putting the bills in the names of the tenants (and adjusting the rent downwards to take account of that)?
Any thoughts / advice gratefully received.Since when?0 -
sheramber said:and I believe this is because HMRC's rules now result in tax being charged on turnover not profits?Since when?0
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You can claim allowable expenses or the property allowance if you£1000, but not both.If your expenses are more than £1000 then you claim the expenses amount.Finance costs are restricted to relief at 20%.Do you fill in your own return or do you have an accountant?0
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ripofflondon said:sheramber said:and I believe this is because HMRC's rules now result in tax being charged on turnover not profits?Since when?I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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ripofflondon said:sheramber said:and I believe this is because HMRC's rules now result in tax being charged on turnover not profits?Since when?0
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